Medicare Advantage Growth Is Associated with Lower Total Medicare Spending

October 2024

Growth in Medicare Advantage (MA) enrollment is associated with slower growth in Medicare spending and likely contributed to lower than expected Medicare spending over the last decade. Increased MA enrollment from 2012-2021 was estimated to generate savings in total Medicare spending as high as $144 billion over that period.

Given the enormity of Medicare expenditures and how quickly they’re growing relative to the rest of the federal budget, there is ongoing interest from policymakers, researchers, and other stakeholders in understanding how to slow Medicare spending trends.

This analysis uses publicly available data from the Centers for Medicare & Medicaid Services (CMS) to examine the relationship between MA penetration (i.e., percent of eligible Medicare beneficiaries enrolled in an MA plan) and total Medicare spending, both across U.S. counties and year-over-year within counties. Linear regression models were used to estimate this association. The findings suggest that increased MA penetration is associated with lower, or decreased growth in, total Medicare spending.

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Topics

Medicare Spending Projections
Growth in MA Enrollment
Methods
Results
Discussion & Policy Considerations

Full report

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